Social Housing’s $2bn Boost Wins Industry Approval

As demand across the nation for social housing continues, the federal government says it will increase funding to deliver more homes for those on waiting lists.

The Federal government said its new Social Housing Accelerator program would make an additional $2 billion available across Australia.

State and territory governments will each get a slice of the new funding within the next two weeks to help create thousands of homes for Australians in need of shelter.

The move is intended to get people off waiting lists and increase the housing supply in the short term.

Property Council Australia chief executive Michael Zorbas said any news that boosted supply was welcome with Australia 1.3 million homes behind in supply over the 20 years to 2021, relative to the 20 years to 2001.

“For decades, Australia has not supplied enough social, key worker or at-market housing to keep up with demand, let alone apply downward pressure on prices,” Zorbas said.

“This investment is a welcome addition to the 30,000-home promise of the Housing Australia Future Fund but we still need the Senate to pass that.

“A million new homes by 2029 should be a very modest target for a nation with our advantages but with further delays in the Senate and the deep declines in new apartment construction in particular, we may fall short.”

The Housing Australia Future Fund has come under criticism with suggestions that the money should be immediately invested in social and public housing instead.

“We know that supply is an important part of addressing the housing challenges we inherited from the former Liberal government,”  Federal housing minister Julie Collins said. 

“This funding will help build more of the rental homes that Australia needs.

“We could do even more if the Senate stopped blocking our $10 billion Housing Australia Future Fund—the single biggest investment in social and affordable rental housing by a Federal government in more than a decade.”

▲ Nightingale’s Coburg project on 170 Sydney Road will have 10 per cent of its apartments set aside for social and affordable housing.

State and territory governments have tuntil the end of June 2025 to allocate the extra funding.

They will also have flexibility to decide how the extra money is spent including on new builds, expanding programs, or renovating or refurbishing existing homes.

It is designed to work alongside better planning systems, zoning and land releases. 

“Every Australian deserves the security of a roof over their head,” Prime minister Anthony Albanese said.

“I met with every Premier and Chief Minister about this proposal, and we all agree securing more housing for more Australians is a key national priority.”

The program is intended to be part of the new National Housing Accord which has a goal to build a million new homes over five years from 2024.

It is also meant to follow the policy decisions around renters’ rights and planning reforms.

▲ A new social housing complex in Gosford.

Meanwhile, the NSW government has announced changes to the planning system after finding that it had inherited a housing construction shortfall of 134,000 homes over five years and a planning system with massive average approval processing times.

Processing times for development approvals have increased from 69 days on average in July, 2021 to 116 days in March, 2023.

Supply tightness in the state has also been signalled via rents for houses and units increasing sharply during the past 12 months.

The planned improvements are intended to incentivise residential housing developers that include at least 15 per cent affordable housing in their project plans.

If those projects have a capital investment value of more than $75 million they will be eligible for the State Significant Development (SSD) planning approval pathway.

They will also get a 30 per cent floor space ratio boost and a 30 per cent height bonus above local environment plan limits. 

“We are looking at ways we can help address the housing supply crisis, this is one of them,” NSW premier Chris Minns said.

“These reforms will provide more homes and more affordable housing in places where people want to live.”

Affordable housing is open to people on a wider range of incomes than social housing, is often managed by not-for-profits with residents whose income is not high enough to cover rent in the area where they live or work.

The SSD pathway is overseen by the Department of Planning and Environment and was established by the former Coalition government.

It often allows for faster planning decisions creating certainty for communities and developers but applications still need to abide by local government decisions about where housing is permitted. 

“We have a shared responsibility to deal with the housing crisis facing this state,” NSW planning minister Paul Scully said.

“We’re facing a shortfall of more than 130,000 new homes over the 5 years to 2029. 

“These changes provide incentives to build more affordable housing with the new pathway providing greater certainty and delivering the government more control of the decision-making process.”

Zorbas said it was critical that states and territories acted and that there were other avenues to explore to address the housing supply issue.

“The role of purpose-built student accommodation and retirement living communities in putting downward pressure on prices in the general rental market, as well as encouraging downsizing, should also be on the radar of decision-makers,” he said.

“The NSW Productivity Commission recently reported we could chop national house prices by 25 per cent with a 10 per cent increase in the supply of new homes and apartments.”

Total federal government investment in housing and homelessness is now more than $9.5 billion in the current financial year to June 30, 2023.

The government is also providing an extra $67.5 million to the states and territories to tackle homelessness.